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Iran Offers $1 Billion Loan for Iraq Projects

TEHRAN (Reuters) — Iran is offering a $1 billion loan to Iraq for projects to be handled by Iranian companies, an Iranian deputy foreign minister said Friday.

The announcement came two days before a landmark visit by President Mahmoud Ahmadinejad to Baghdad, the first by an Iranian president since the 1979 Islamic Revolution.

Iran and Iraq fought an eight-year war in the 1980s that left about one million people dead, but relations between the countries have warmed substantially since the United States-led invasion in 2003 that toppled the Iraqi leader Saddam Hussein.

Mr. Ahmadinejad is scheduled to arrive Sunday for a two-day trip to build on business and political ties with Iraq.

“Iran’s $1 billion loan to Iraq has been one of the main issues of discussion with the Iraqi side,” the deputy foreign minister, Alireza Sheikh-Attar, told the official Iranian news agency IRNA in Baghdad.

The loan would cover basic projects by Iranian contractors using Iranian goods and equipment, he said.

The United States has accused Iran of financing, training and equipping Iraqi militias to destabilize Iraq, a charge Iran has denied, blaming the American presence for instability. Iran says it wants a stable neighbor and American troops to leave.

A version of this article appears in print on , on page A8 of the New York edition with the headline: Iran Offers $1 Billion Loan for Iraq Projects. Order Reprints|Today's Paper|Subscribe